The NFT space can feel like information overload at times, so we’ve cut through the noise to deliver you a curated dose of what matters most. Your all-in-one weekly companion.
Headline News - Biden signs executive order on ‘Ensuring Responsible Development Of Digital Assets’
This is huge! No doubt about it. The news caused a short-lived move in Bitcoin from around 38.5k to 42.3k, a cautionary cheer from the market, before retracing back again.
The executive order stated "Growing development and adoption of digital assets and related innovations, as well as inconsistent controls to defend against certain key risks, necessitate an evolution and alignment of the United States Government approach to digital assets".
It’s important to note that the executive order did not outline any immediate regulatory implications, but rather called upon federal agencies to coordinate their efforts in bringing about a framework on how best to tackle the industry’s shortcomings.
A primary focus of the order was consumer protection. It stated "The unique and varied features of digital assets can pose significant financial risks to consumers, investors, and businesses if appropriate protections are not in place".
Several government bodies, including the SEC, have been given 180 days to provide recommendations regarding consumer protection issues.
The executive order was met with varying degrees of optimism. Many welcomed the long-awaited acknowledgement of the need for more clearly defined regulations, whilst others feel the order lacked substance, and was too heavily orientated around CBDC’s (Central Bank Digital Currencies).
With regards to the NFT market, we already know the SEC is investigating potential securities violations. Both Bitcoin and Ethereum have not been classified as securities as they are both viewed as currencies. However, due to the additional benefits for both creators and users, NFTs are currently under review.
With this executive order now in place, we can expect to get clarity on this issue in the coming months, as well as being provided a clearer and stricter regulatory framework with regards to the NFT market in general.
For a summary of the SEC investigation into NFT security violations, please click here, and for a more detailed look at the fallout of the executive order, take a look here.
Curated News - the best of the past week
Music Sharing Service LimeWire Is Back—As an NFT Marketplace
Largest ever NFT-backed loan uses 101 CryptoPunks as collateral
31 NFT Projects Are At Risk From One Bit Of Code By Dev from Fiverr
Ledger announces limited edition NFT-focused hardware wallet
NFT fashion hits the runway as designers launch in the Metaverse
Crypto.com airdrops LeBron James NFT to eagle-eyed Super Bowl ad viewers
@UkraineDAO Flag NFT Sells for 2258 ETH (approx. $6.75mill USD)
VeeFriends Series 2 details unveiled in blogpost with snapshot on 5th April
CVS Health Is The Latest To File For NFT and Metaverse Trademarks
Maybe Something - things we’re keeping an eye on
Gutter Juice (Zen DYOR Pick) - The Gutter Cat Gang is one of the OG PFP collections with a passionate community. The new Gutter Juice collection is a great opportunity to get exposure to this ecosystem. Check it out here.
Crypto Coven (Zen DYOR Pick) - They peaked at a floor of 3ish ETH and are now back 'down' to 1ish. This community and project are awesome. Probably a decent entry at this price.
CryptoBatz Can Now Bite CyberKongz To Create Something Incredible
Deadfellaz release exciting details regarding their interoperability goals
Josie Bellini’s CyberBrokers can’t be ignored. Huge volume, great price action
EggsDAO are raising donations for Ukraine via an NFT raffle. One week left
Dolphin Entertainment to Produce TV Shows, Games, Music With Flower Girls Ethereum NFTs
Talking Point - Market Opportunities
Google Trends data has revealed that searches for ‘metaverse’ and ‘NFT’ are down considerably since the latter stages of 2021. They are currently at an all-time low having continued their downtrend since the beginning of the year, and this has coincided with a market cool down. But is this cause for concern, or something else?
The answer depends on your conviction. If you have high conviction in the NFT space then you’ll not be fearful, and you’ll recognise it as an opportunity instead. These waves of interest and mini-bubbles are just part and parcel of such a nascent industry.
Warren Buffett once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.”
As investors shift their attention away from high-risk endeavours and towards so-called ‘safe haven assets’ in reaction to global events, two things happen in the NFT market:
Liquidation of NFT assets
Severely reduced sales volumes
However, during such periods of instability, there is often great opportunity. With people intent on offloading riskier assets, combined with a slump in potential buyers, we’ve seen NFT floor prices drop considerably.
Take this one example: There’s a highly coveted historical NFT asset called ‘NINJASUIT’. It’s considered one of the few “holy grails” within the NFT space, and had been trading at around 20ETH a couple of months ago, with a local high of 28.8ETH. Enter the bear market. Over time, sellers began asking less and less, until one went all the way down to 7ETH, which was snapped up within hours of listing. This represents just over 75% discount on the recent high of 28.8 ETH, and an incredible deal for such a highly regarded collectible. The floor now sits at 15ETH.
The point here is that bearish markets are excellent buying opportunities, so always keep enough liquidity on hand to be able to participate. Also, patience is a virtue in this game. If you’re after an expensive asset, be prepared to wait for the right entry price.
A more obvious example of this has been the ‘Bored Ape Yacht Club’. This collection has retraced from over a 120ETH floor down to a low of around 68ETH. Take into account the ETH/FIAT rate changes too, and they are at a considerable discount versus two months ago.
If you have a shortlist of NFTs you want to purchase, now is a good time to check out the entry prices. Of course, we could see prices drop further, but if you are long on the collection, you can at least be sure you’re not buying the top in the current market conditions.
Top 5 NFT Sales of the past week
Yelling Doge NFT (420.69 ETH or approx. $1.06M)
Ringers #376 (306.52 WETH or approx. $801.33k)
MusicHub - Decentraland (272k MANA or approx. $709.92k)
MetaVex Land Sale - Sandbox (215k SAND or approx. $649.29k)
Bored Ape Yacht Club #3666 (250 ETH or approx. $638.65k)
Note: The above list is in descending order of ETH/WETH value. This is not necessarily true of the USD value due to ETH/USD fluctuations throughout the week.
Tip Of The Week - Don’t ape, be cool
I think this is a timely tip with some great purchases on offer for those who bide their time. Don’t ape into every hyped project. Relax a little, be patient and purchase with conviction.
It’s all too easy to get caught up in chasing the next ‘Cool Cats’ or ‘Akuzi’ NFT. It’s true, you can get lucky, and you can turn a small investment into some sizeable profits. BUT…the reality is these success stories are the exception, not the rule.
The vast majority of people will see their purchases depreciate in value, especially those who purchase through minting. Why? It’s simple: the laws of probability.
Newer projects are a much higher risk investment for several reasons. These include the following:
Often unproven and inexperienced teams
More susceptible to being rugged/cash grabs
The majority of investors are likely speculating in the early stages, and unless the project delivers price action fast, they are liable to jump ship
The NFT space is ultra competitive and the project may simply not survive
The team may not deliver on promises & the community may lose interest
These are just unfortunate truths. Obviously not all new projects fall into these categories, but you’re certainly more likely to be exposed to one or all of these factors if the project is new.
With this in mind, it can be argued that the best way to invest in NFTs, although often at a higher entry price, is in already established projects.
You can negate the vast majority of the above risks if you invest in a project that’s already matured somewhat. And you can still see impressive returns when compared to more traditional investment vehicles.
Sometimes the best opportunities are those that are staring you in the face. Long-standing projects with strong communities, great teams, big ambitions and relatively accessible floor prices are the ones to watch. Some examples might include Creature World, Deadfellaz, Crypto Covens and Crypto.chicks (disclaimer: I do not currently own any of these projects, but am watching all closely). As always, DYOR.
ZenAcademy and 333 Club Noticeboard
Current News and Events
Don’t forget, Zeneca is still raffling off 3 NFTs every day for the next few days.
Zeneca’s course on 'How to Launch an NFT Project' is now available for purchase at https://nasacademy.com/zeneca. This will be free for anyone that holds a ZA Genesis or 333 Club NFT (access will be given closer to when the course goes live in early April).
Check out our new ‘Sports Chat’ channel in Discord. If that’s your thing, jump in here.
Our Book Club has started, with ‘Ready Player One’ the first book to be read. Join in on the discussions here.
Regular Members Benefits
Join our poker nights via our Discord. Events held every Saturday 10pm GMT, with prizes to be won.
Join our community initiative Weekly Creative Prompts! Find our more in our Discord by clicking here.
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Nothing in this or any other ZenCaps publication should be construed as financial or investment advice. The views and opinions expressed in ZenCaps publications do not reflect those of Zeneca_33 or the ZenAcademy.
Always exercise caution within the NFT space and adhere to best practices when it comes to making any investments. There is plenty of potential, but this comes with inherent risks.
Stay safe, and as always, good luck.